The Working Man

I posted this recently on author Alexander Elder. A response to that came in from a reader

The Turtles, if I read your book correctly, were winnowed down out of about 1000 applicants, and given a two week or whatever intensive tutoring, and watched over like hawks. Most traders, investors, or weekend punters, do not have the advantage of intensive training by the turtle trainers, or by a Warren Buffett , for that matter. Possibly Dr. Elder’s advice is more in tune to the “working man”.

The working man. What a term. What a silly term! If you make too much (whatever that number is exactly) you are no longer working? As for the Turtle view presented above clearly this reader only made it through certain parts of my book “The Complete TurtleTrader”. He only absorbed the parts that buttress the view he wants to have. How can anyone read Chapter 11, 12 and 13 and come to his view?

You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.

3 thoughts on “The Working Man

  1. A good trader does his research and not learning from others what to do.

    A friend of mine is trading on behalf of a local fund, he had extensively studied ‘The Logical Trader’ by Mark B Fisher and he lost 70% of the allocated money in 6 months.

    He had learned and practiced what to do so well, but he did not know where the edge lies, no one can know an edge by learning what to do, you get an edge when you know why you do something.

    I don’t trust any great trader to teach me what to do, for a reason, it’s because these people are so good at it and what we learn from them is the end result of their approach and not the details of how this approach was created.

    The best way is to get historical data and start from scratch with no guidance, then when you stumble you read others opinions and form yours, never apply someone else’s opinion, instead you learn the details of that opinion and add see if there are some new insight.

    Like moving averages and other indicators, there are laws that move the price and indicators only give you the end result of the move, they are like our eyes seeing a car coming at us and we move away, seeing the car is mealy light reflecting of the car and not the car its self, with our knowledge we know the car heavy and will injure us if we risk staying in the way, we don’t run 100 meters away but we move 5 meters and the risk is minimized and if it was a bicycle we move only 1 meter.

    The best way is to start from historical data, absolutely from scratch and build our own experience, and on the way you will see patterns that other people talk about, but you don’t see them because someone told you they are there, no, you see them because you looked hard enough and now you see.

    It is not an easy approach, but it’s fun and rewarding.

    I remember reading Warren Buffet saying one should measure things with his own yard stick, regardless of his success, the sentence proves right because no one invents ideas, they are there for those who look for them, its like forming a puzzle out of a pile of pieces, there are so many puzzles with deferent sizes and images and there are so many ways of the from start to finish of the puzzle, some people start from corners and some others from the middle, at the end all puzzles are similar, only deferent in size and color.

    Never blame your losses or disability on others, or you will not over come them because others will not do it for you.

  2. Mohammed,
    Excellent insight! As in many other endeavors, those who are truly “expert” are operating on instinct and reflex. They are not being evasive, when they have trouble telling you what it is that makes them successful, because it is completely internal and in some instances unconscious.

    For those of us who are trying to learn, however, we need to have some external input to know what it is we are trying to see….without that, we don’t know where to look or what it is we are looking for.

    I like your analogy of the puzzles….there are many out there, and you can have success with any number of them….
    In short, I guess you could say that there are a lot of right answers to the problem….which one works for you?…

  3. Life is self similar like, examples are everything, if you know how to drive a car its only because you learn to measure risk and reward while driving down the street, we become so good at them because driving a car involved our direct feelings of risk, reward and we adjust speed accordingly.

    Life is self similar like in fractal science, for example I move on two legs as one drags me forward to the max extent and then i put then the other leg which is back swings forward and makes the first leg become in the back again. It is like taking a window of 5 days of price movement and dragging it through an excel sheet and seeing the accumulation go up and down from the mean (Zero).

    Then when we want to go faster we lose money when we buy a car and use wheels which are always touching the ground and alternating (like our legs) yet at faster speeds which makes us move faster than running on legs, now if we run in the middle of the street it becomes dangerous so we instead drive our car and although cars are fast compared to us humans but they are similar in speed compared to each other which minimize the risk, its like some stocks that more $1 a day and we buy a lot of this stock because its cheap, but another stock which moves at $10 a day we buy less of that stock to match the risk between both trades and to be appropriate to our equity size.

    The point is in any 10 days the stock that moves $10 a day will move 10 times more than the slower stock, so its like driving a car instead of running, because this stock moves a lot so by trade a larger amount of the move, to trade a large amount of its move we buy lesser stocks and we are driving a car now.

    There is nothing called time, time is a third party measure, it is only used to synchronize between deferent scales so we can live together, weak or strong, small or big, tall and short, fast and slow.

    The measurement of price movement can only be done by the price its self, by adjusting the zoom to a single time (a clock, a constant rotating object, anything that is used as a pivot for synchronizing between trades)

    So many examples around us are like the stock market, we just don’t look for them, I now look and see them every day, its amazing and I have come to know fractal science, not by name but by coincidence by looking through excel sheet price data and moving a zoom for example 5 days or any zoom through the price, I saw so many patterns that repeat in nearly fixed ratios on the long run, like Brownian motion which I heard it is not actual random movement of particles but can be measured.

    These nearly fixed ratios are only found on the long run, so previous moves don’t affect future moves, but the market have many scales of moves on each zoom, they repeat all the time and cannot be predicted when, but we don’t need to predict now that we know they will repeat, we only forecast and adjust our position size when we are wrong and adjust it when we are right. Its like when we drive a car, we don’t say that after this car have passed beside us that there will be a space for us to change lanes, after the car have passed we look and there might be another car so we keep looking and waiting, knowing that its really not possible that all cars are now targeting us and all driving on our side with no spaces between them, we will find a space and we will change lanes, its faith of knowing the possibilities, its like religion and pharmaceuticals, we apply the same rules again and again in religion yet we may not see the profits right away but its proven on the long run, and we research medicine on the long run and we see percentage patterns of some people being allergic and another percentage of people whom will benefit and other whom will not and a lot of patterns that if we research through the data we will see.

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